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30 Jul 2012

UK Workers' Pension Saving Down 15% Since 2007

Pension saving among private sector employees in the UK has declined by 15% between 2007 and 2011, according to the Employers' Pension Provision Survey 2011, published by the Department for Work and Pensions last Thursday.

The survey, which was carried out by the National Institute of Economic and Social Research and TNS-BMRB and included 3,093 private sector employers, showed that only 26% of private sector workers were active members of the pension scheme of their employers in 2011, compared with 31% in 2007.

In addition, only 31% of private sector firms offered any pension provision for their employees in 2011, against 41% in 2007. Some 45% of organisations that had no current workplace scheme planned to enrol all their workers into the National Employment Savings Trust (NEST), another 11% intended to set up their own scheme, while 5% planned to combine the two options.

Six out of ten employers that offer some form of pension provision said they would keep all current members of their biggest or only scheme in their existing scheme, while 6% intended to enrol all current members into NEST. Half of the firms planned to enrol all non-members and new employees in their existing scheme, while 19% would enrol all non-members and new employees into NEST. Overall, only about 20% of all private sector employers offer some form of workplace scheme open to new members.

The findings came as Pensions Minister Steve Webb said the decline in pension saving would be reversed thanks to automatic enrolment, due to begin in October, adding that around half of the organisations without pension provision would choose NEST for their employees.

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